Egypt’s new investment law

Guide to Egypt’s New Investment Law for Foreign Investors

Egypt’s new investment law, officially Law No. 72 of 2017, represents a landmark shift in the country’s approach to attracting foreign direct investment (FDI). This legislation created a more streamlined, secure, and incentivized framework for international businesses looking to establish a presence in the region. Understanding its key provisions is essential for any foreign investor. At Alzayat, Egypt’s First International Law Firm, we specialize in guiding clients through this modern legal landscape, ensuring a compliant and cost-effective incorporation.

Why Egypt’s Foreign Investment Framework is Now More Attractive

The government enacted this law to address previous bureaucratic hurdles and enhance investor confidence. It establishes the General Authority for Investment and Free Zones (GAFI) as the primary administrative body, creating a more centralized and efficient process. Furthermore, the law offers a compelling package of benefits designed to make Egypt a premier investment destination.

Key Features and Incentives of the Investment Law

The legislation is built on several pillars that directly benefit foreign investors. These range from significant financial incentives to robust legal protections for invested capital.

Investor Guarantees and Protections

To build confidence, the law provides strong guarantees. These include fair and equitable treatment for foreign investors, on par with Egyptian nationals. It also ensures the right to repatriate profits and protects against the nationalization or expropriation of assets. These protections are critical for managing the risks associated with a major investment. The World Bank has noted these reforms as positive steps toward improving the business climate.

The Golden License: A Fast-Track for Strategic Projects

One of the most significant innovations of Egypt’s new investment law is the “Golden License.” This is a single, comprehensive approval issued by the Cabinet that covers everything needed to establish, operate, and manage a project. It can include building permits, operational licenses, and other regulatory approvals in one package. This dramatically cuts through red tape, making it an invaluable tool for large-scale or strategic investments that align with Egypt’s national development goals.

Choosing Your Business Structure Under the New Law

The law provides flexibility in choosing a business structure. The two most common options for foreign investors are the Limited Liability Company (LLC) and the Joint Stock Company (JSC). An LLC is generally simpler and ideal for most commercial operations. A JSC, in contrast, is better suited for larger projects that may require raising significant capital. Selecting the right structure is a foundational decision where expert legal advice is crucial. This is a core part of navigating Egypt’s new investment law effectively.

How Alzayat Law Firm Guides You Through the Process

Navigating the requirements of the General Authority for Investment and Free Zones (GAFI) and ensuring full compliance is our specialty. As an international law firm, we provide end-to-end support for your incorporation. Our services include advising on the optimal business structure, preparing and filing all necessary documents, and liaising with government bodies on your behalf. We ensure the process is handled efficiently, allowing you to focus on your business objectives. This level of support is crucial when dealing with the intricacies of Egypt’s new investment law.

For further reading on the legal theories behind investment treaties, academic sources like the Journal of International Economic Law offer in-depth analysis. Our team at Alzayat Law Firm translates this theory into practical success for our clients.

Frequently Asked Questions

1. Can a foreign investor own 100% of a company under Egypt’s new investment law?

Yes. For most sectors, Law No. 72 of 2017 allows 100% foreign ownership for both LLCs and JSCs. This was a major reform designed to remove the previous requirement for a local partner in many industries, making direct investment much more attractive and straightforward.

2. What is the minimum capital required to incorporate a company?

For a Limited Liability Company (LLC), the law does not set a specific minimum capital. Instead, it requires the capital to be “sufficient” to achieve the company’s objectives. In contrast, a Joint Stock Company (JSC) has higher, more defined capital requirements, making the LLC a more accessible option for many investors.

3. How does a company qualify for the Golden License?

A company must be undertaking a project considered strategic or vital to national development goals. This often includes projects in infrastructure, renewable energy, technology, or large-scale manufacturing. The application is submitted to the Cabinet, and approval is granted on a case-by-case basis based on the project’s potential impact on the Egyptian economy.

4. What are the main tax incentives offered under the law?

The law provides for investment incentives that can include significant tax deductions. These deductions are calculated as a percentage of the total investment cost and can be deducted from the company’s net profits subject to tax. The percentage and duration of the deduction depend on the geographic location and sector of the investment.

5. Do I need to be in Egypt to incorporate a company?

No. The entire process of incorporating a company under Egypt’s new investment law can be handled remotely. By issuing a Power of Attorney to a licensed law firm like ours, we can act on your behalf to complete all necessary filings and legal procedures, allowing you to establish your business from anywhere in the world.

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